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CSR Report 2018

A-（2）-060002

RhodiumWhen solidified, cannot be melted by anything. Very hard element used for plating to create hard surfaces.

IridiumUsed for vehicle spark plugs because of excellent hardness and corrosion resistance, and for the crucibles used to manufacture sapphire substrates for LEDs because of high heat resistance.

RutheniumUsed as an optical catalyst to reduce water to hydrogen. Enables increased storage capacity for hard disks.

OsmiumUseful in biotechnology and forensic sciences.

PlatinumFrom catalysts to anticancer agents, a promising star with much hidden potential.

GoldIn addition to being used for jewelry, this multitalented element is used for ultrafine wires in mobiles and smartphones, playing a hugely important role when conducting electricity.

SilverWithout silver, photographs would not have been invented. Found all around, including your mirrors.

PalladiumAble to absorb large amounts of hydrogen, so perfect for use with high purity hydrogen generators.

Printed on environmentally friendly FSC-certified paper using wood from properly managed forests

Printed on paper made with wood from forest thinning. “Morino Chonai-Kai” (Forest Neighborhood Association)--Supporting sound forest management.

This report is printed using vegetable oil ink.

Pr inted by waterless printing method, which produces no hazardous waste liquid.

T h i s r e p o r t u s e s a Universal Design (UD) font which is easy to read.

The TANAKA Group supports an initiative to preserve forests by promoting the use of domestic timber.

Development of a Hydrogen Society06

Effective Use of Precious MetalsResearch and Development to Create a Wide Range of Values

08

Quality of TANAKA10

Message from the President02

IntroductionAbout the Tanaka Kikinzoku Group

CONTENTS

00

Businesses of TANAKA and Values Provided by It04

Protection of the Global Environment12

Compliance, Risk Management and Corporate Governance

20

Creation of a Safer Work Environment16

Active Role of Each Employee18

Contribution to Local Communities and Society14

CSR PerformanceThird-party Assurance22

Third-party OpinionISO 26000 and SDGs Comparison Table

24

Free, Vigorous and Honest Corporate Culture

For Customers, for the Environment and for Society

Values Created by TANAKA

01TANAKACSR REPORT 2018

Tanaka Kikinzoku Group publishes its CSR Report to report the corporate social responsibility (CSR) activities promoted by the Group for making contribution to the realization of a prosperous society and a beautiful future for the Earth supported by precious metals, as well as to enhance communication with stakeholders for the improvement of the Group's initiatives in the future. This year’s report adopts a new design concept of “spring," which symbolically represents that new values are generated from the activities of the Tanaka Kikinzoku Group like a spring that never runs dry and make a social contribution. We would be honored to receive feedback from our stakeholders. Your comments and opinions will be used to improve the Tanaka Kikinzoku Group’s future initiatives.

Editorial Policy

April 1, 2017 to March 31, 2018In order to provide a general view of activities under each topic covered in the report, some contents may represent activities taken outside this period.

Period

TANAKA Holdings Co., Ltd. and consolidated subsidiaries. However, Metalor Technologies International SA is excluded. Indications are made in areas of the report where the scope differs.

Scope

Japanese Standards Association, ISO 26000:2010Reference guidelines

This report and past issues are also available on our website:http://www.tanaka.co.jp/english/csr/index.html

Website

TANAKA Holdings Co., Ltd.CSR & Corporate Communications Division, CSR Promotion DepartmentTokyo Building 22F, 7-3, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-6422, JapanTel: +81-3-6311-5506 (direct), Fax: +81-3-6311-5508, website: http://www.tanaka.co.jp/english/index.html

Publisher

July 2018Publication

2016

5,813

37

10,643

2016

2016

2014

20140

2,000

4,000

6,000

8,000

10,000

2013

9,766

2017 FY

(100 million yen)Net sales

(100 million yen)Total assets

12,000

0

1,000

2,000

2013 2017

5,662

FY

3,000

4,000

6,000

5,000

(100 million yen)Net income attributable to owners of parent

0

20

40

60

80

100

2014

2015

4,5453,989 4,222

8975

134

2017

50

8,5649,677 10,267

2015

20152013 FY

120

140

Overview of the Tanaka Kikinzoku Group

■Financial results overview

Net sales

Income before income taxesNet income attributable to owners of parent

Total assets

Capital adequacy ratio

976,613

18,039

13,391

566,196

37.0％

91.8％

294.4％

362.9％

97.4％

ー　

Year-on-yearchangeFY2017

million yen

1,064,259

6,128

3,690

581,304

33.4％

FY2016

TANAKA is accredited as a Good Delivery Referee for gold and silver by The London Bullion Market Association (LBMA), and also appointed as a Good Delivery Referee by London Platinum & Palladium Market (LPPM). In both cases, TANAKA is one of the only five Good Delivery Referees in the world (and the only one in Japan), which are responsible for assessing Precious metals melting technologies and analytical skills of all accredited gold and silver refiners.

Corporate Philosophy and Code of Conduct

Corporate Philosophy

The TANAKA group:

A leading company in the field of precious metals,

With superior creativity and technical excellence,

We build customer trust through rapid responses that exceed expectations,

Contribute to the creation of a prosperous society,

As well as to the future of the planet through sustainable use of precious metals.

1. Greet Everyone

2. Show your Smile

3. Give thanks

4. Maintain Safety

5. Challenge Yourself

Code of Conduct

Understanding rapid changes in the business environment deeply and comprehensively and responding to risks with foresight

GOGO Plan 2020

What TTanakka Kikinzoku Group Wants too Be in 2020What Tanaka Kikinzoku Group Wants to Be in 2020

FY2015 FY2017 FY2020

StartState we needto achieve

In addition, to monitor risks related to financial derivative products properly, we set up the Derivative Transaction Committee in fiscal 2017. Furthermore, based on the concept of KYC (know your customer), which was originally shared by financial institutions and is widely recognized now, we established Transaction Screening Department in April 2018. This new organization has functions to handle issues on so-called conflict minerals and eliminate transactions with antisocial forces. The department is also designed to address issues on CSR procurement, which has been demanded on a global scale in recent years, such as RBA (former EICC) and LBMA. These various measures are indispensable for us to maintain our business activities in a stable manner (for the sustainability of the company) and fulfill our corporate social responsibility (CSR). We will continue to certainly address risks with the Risk Management Committee playing the pivotal role.In the second stage of the GOGO Plan 2020, which starts in fiscal 2018 and continues for three years, we aim for our growth and development to be a global company in order to achieve the "Ideal State we would like to achieve" for the Tanaka Kikinzoku Group. While accelerating the progress, we will further promote and develop CSR activities to satisfy all stakeholders including customers, suppliers and partner companies all over the world. I would be happy if you read this report and place your expectation on the Tanaka Kikinzoku Group, which will promote CSR activities in a more global way. We will also do our best to live up to your expectations.

03TANAKACSR REPORT 2018

Message from the President

Promoting CSR activities on a global scale for sustainability toward 2020 and beyondCompliance, governance, cybersecurity, disasters, safety, the environment…We will manage various risks and move toward the "State we need to achieve."

During the three years, we enhanced and expanded our business base at a faster pace than ever. Our achievements in the period included the restructuring to establish the in-house company system in fiscal 2015, acquisition of 100% of

the outstanding shares of Metalor Technologies International, a peer company based in Switzerland that has a history of more than 100 years like our Group, in fiscal 2016 and the conversion of Electroplating Engineers of Japan, Limited (EEJA) and Taiwan Tanaka Kikinzoku Kogyo Co., Ltd., each of which had been a joint venture company set up with an overseas partner since its foundation, into wholly owned subsidiaries of Tanaka Kikinzoku Kogyo K.K. in fiscal 2017. Prior to those business development activities, we established the Risk Management Committee for risk management of our Group as a whole in fiscal 2015 and have identified various risks and promoted countermeasures against them since then. We now conduct risk assessment while clearly segmenting the areas to be addressed into natural disasters, occupational accidents, health hazards, environmental problems, leakage of personal information, leakage of confidential information, issues related to conflict minerals and issues related to financial derivative products. Based on the assessment results, we determine the priority and take countermeasures against the risks. With respect to safety, in particular, we conducted a comprehensive safety inspection of all production sites to thoroughly ensure safe operations as a manufacturing company. We implemented a review of procedures for non-regular work and improvement measures to reduce the risk of being caught and also checked the implementation status. The implementation of the improvement measures with the concerted efforts of all employees did not only promote the improvement steadily but also enhanced their safety awareness. As a result, we successfully reduced the number of accidents on production sites to the lowest level ever in fiscal 2017.

02 TANAKACSR REPORT 2018

In Fiscal 2017, we were keenly reminded of the need to analyze risks from multiple perspectives and constantly develop and strengthen legal compliance and corporate governance as foundations of the company. Some very famous leading companies caused financial mismanagement and quality fraud scandals. Evolution of IT resulted in problems related to cybersecurity and the protection of personal information. The geopolitical situation in the world has been changing more rapidly than ever. In such a business environment, we believe that we are strongly required to understand and follow up issues on risk management deeply and comprehensively and maintain business activities with foresight.

Fiscal 2017 was the third year of the first stage for the GOGO Plan 2020, a six-year medium-term management plan of the Tanaka Kikinzoku Group and the end of the fiscal year was the halfway point for the plan. We set the goal to be reached in the first half of the plan as the "State we need to achieve" and made efforts to steadily meet the performance targets in the three key precious metal businesses, namely industrial products, assets and jewelry. To this end, we worked to establish our business base through the strengthening of communication and cooperation among the Group.

TANAE AkiraPresident & CEO,

TANAKA Holdings Co., Ltd.

Ideal Statewe would liketo achieve

Ideal Statewe would liketo achieve

Having inherited the free and vigorous corporate culture, Tanaka Kikinzoku Group has grown and developed

to be a global company as a result of the further promotion of the

three key precious metal businesses.

04 TANAKACSR REPORT 2018 05TANAKA

CSR REPORT 2018

We provide customers in a very wide variety of fields, ranging from semiconductors and electronic parts to medicine and food, with products that solve their problems. We underpin the industry in general and the foundation of society through the supply of precious metal materials as an "unsung hero." V

alues Created by TA

NAKA

Businesses of TANAKA and Values Provided by ItTANAKA has delivered special values based on precious metals to the world for more than 130 years since the foundation. We will continue to try everything we can do with precious metals and develop new fields.

Artifacts

TANAKA Holdings Co., Ltd. （THD）● Headquarters (Tokyo)

Electroplating Engineers of Japan, Limited （EEJA）● Headquarters (Tokyo) ● Hiratsuka Office

Tanaka Kikinzoku Kogyo K.K. （TKK）● Headquarters (Tokyo) ● Iwate Plant ● Tomioka Plant ● Ichikawa Plant ● Sodegaura Plant ● Isehara Plant ● Hiratsuka Plant ● Shonan Plant ● Hiratsuka Technical Center ● Tsukuba Facility / Tsukuba Technical Center ● Isehara Technical Center ● FC Catalyst Development Center ● Tanaka Distribution Center ● Nagoya Branch ● Osaka Branch ● Fukuoka Branch ● Kyoto Sales Office

Domestic bases

Tanaka Kikinzoku Jewelry K.K. （TKJ）Store: GINZA TANAKA●Main Store (Ginza) ● Shinjuku Store ● Store at Hotel Chinzanso Tokyo ● Isetan Tachikawa ● Yokohama-Motomachi Store ● Sendai Store ● Niigata Mitsukoshi ● Nagoya Store ● Nagoya Mitsukoshi Sakae ● Shinsaibashi Store ● Takamatsu Mitsukoshi ● Fukuoka Nishitetsu Grand Hotel Store

Nippon PGM Co., Ltd. （PGM）● Headquarters (Tokyo) ● Kosaka Plant

Electroplating Engineers of Japan, Limited （EEJA）● EEJA (Shanghai) Co., Ltd.

Heesung Metal Ltd. （HEESUNG）

Chengdu Guangming Paite Precious Metal Co., Ltd. （GMPT）

Tanaka Denshi Kogyo K.K. （TD）● Tanaka Electronics Singapore Pte. Ltd. (TES) ● Tanaka Electronics Malaysia Sdn. Bhd. (TEM) ● Tanaka Electronics (Hangzhou) Co., Ltd. (TEC)● Tanaka Electronics Taiwan Co., Ltd. (TET) ● Tanaka Electronics Taiwan Co., Ltd. Technical Center (TET/TC)

Overseas bases

Nippon PGM Co., Ltd. （PGM）● NIPPON PGM AMERICA, Inc. ● NIPPON PGM EUROPE S.R.O.

Metalor Technologies International SA

(Data as of May 31, 2018)

Values Createdby TANAKA

Prosperity

EnvironmentalConservation

Health

Fun

Security

Safety /Trust

Tanaka Kikinzoku Kogyo K.K. （TKK）● Taiwan Tanaka Kikinzoku Kogyo Co., Ltd ● Tanaka Kikinzoku (Ningbo) Co., Ltd. ● Tanaka Kikinzoku (Chengdu) Co., Ltd. ● Seoul Branch ● Hong Kong Branch ● Taipei Branch • Kaohsiung Sales Office ● Tanaka Kikinzoku International (Shanghai) Co., Ltd ● Tanaka Kikinzoku International (Shanghai) Shenzhen Branch ● Tanaka Kikinzoku International (Singapore) Pte., Ltd. ● Tanaka Kikinzoku International (Singapore) Pte., Ltd. Manila Branch ● Tanaka Kikinzoku International (Thailand) Co., Ltd. ● Tanaka Kikinzoku International (America) Inc. ● Tanaka Kikinzoku International (America) Inc. San Jose Branch ● TANAKA America, Inc. ● Tanaka Kikinzoku International (Europe) GmbH

AuAg Company Chemical Recovery Company

Semiconductor Company

Supply of materials for semiconductor devices (bonding wires, plating solutions and devices)

New Business Company

Creation and commercialization of new precious metal products that contribute to society

PGM Company

Supply of platinum group materials (platinum devices for glass dissolution, targets for harddisks, ultrafine wires for sensors and medical uses)

* The organizations above are in-house companies set up by Tanaka Kikinzoku Kogyo K.K. for six business areas. They also work together with other Group companies.Accumulation services Bridal jewelry

Bullion

Coin

Industrialproducts

We offer options to readily use platinum, gold and silver as valuable and reliable assets.

AssetsWe deliver jewelry, which shines brightly in various scenes of life, with reliable quality that is worth treasuring for a long time.

Jewelry

Jewelry

Supply of gold, silver and alloy metal-based materials (electrical contacts, target materials, joining materials, etc.)

Supply of paste, catalyst and compounds based on the world-class precious metal recovery and refining technology

Tanaka Denshi Kogyo K.K. （TD）● Saga Production Headquarters ● Tokyo Office● Shonan Satellite Plant

22

2



CSR REPORT 2018

H₂

H₂

H₂

H₂

H₂

H₂

H₂

Development of a Hydrogen SocietyHydrogen energy is gaining attention as energy for the next generation. The Tanaka Kikinzoku Group will help realize a hydrogen society through its precious metal businesses.

Development of Electrode Catalyst for Water Electrolysis

While efforts to reduce greenhouse gas emissions are being made with a focus on the Paris Agreement that came into force in 2016, the use of hydrogen is recognized as a core technology for the shift from fossil fuels. Hydrogen, which generates no CO₂ when used, is an ultimate clean energy source if it is produced with renewable energy such as sunlight, wind and biomass. The use of hydrogen for various applications such as automobiles and households is promoted in Japan and other countries. Tanaka Kikinzoku Kogyo K.K. has developed and manufactured products that are essential for the production and use of hydrogen based on the precious metal technology that it has accumulated for many years, including electrode catalyst and electrolytic membrane used for fuel cell and water electrolysis, as well as reforming catalyst and palladium alloy hydrogen permeable film used for hydrogen purification. We are actively working to help realize a hydrogen society by supplying these products to the market.

Potential of Fuel Cell and FC Catalyst Development Center

Mitigation of Global Warming and Expectations for the Use of Hydrogen

The expanded introduction of renewable energy is accompanied by the growing importance of large-scale power storage technologies to store surplus power for a long time. One of the most promising large-scale power storage technologies is Power-to-Gas, a technology to produce hydrogen through water electrolysis using surplus power, store the hydrogen and use it for power generation or as fuel when needed. Tanaka Kikinzoku Kogyo K.K. develops and manufactures electrode catalyst used for solid polymer water electrolysis, which is a significant technology for Power-to-Gas and started to supply samples of catalyst coated membrane (CCM), which is electrolyte

membrane with catalyst, for evaluation in 2018. We will provide CCM that is suitable for devices and requests from infrastructure equipment manufacturers to help shorten the period of technological development and contribute to the development of even more efficient devices.

Electrode catalyst for PEFC

Tanaka Kikinzoku Kogyo K.K. started to recognize the potential of fuel cell more than 30 years ago and has developed electrode catalyst for it since then. We especially focus on catalyst for polymer electrolyte fuel cell (PEFC), which features small size, light weight and high output and is used in fuel cell vehicles as well as ENE-FARM, fuel cell for domestic use. The use of ENE-FARM has been expanding, as exemplified by the cumulative installations exceeding 200,000 units in 2017. PEFC is composed of two electrodes (positive and negative) and a solid polymer membrane that partitions them. Hydrogen (H₂) is decomposed into hydrogen ion (H+) and electron (e-) at the negative electrode and the electron moves to the positive electrode via an external circuit, which is a mechanism to generate an electric current. The hydrogen ion passes the solid polymer membrane and reaches the

positive electrode, at which it reacts with electron and oxygen (O₂) to generate water (H₂O).While we established FC Catalyst Development Center in Kanagawa Prefecture in 2013 as a base for research, development and production of catalyst for PEFC in order to develop a system for the stable supply, we are now constructing a new building of the center to respond to demand growth in consideration of the circumstances such as the widespread use of fuel cell buses.

CCM for research and development that is provided for evaluation

Fuel cell solutions provided by TANAKAH₂

ProductionH₂

UseH₂

TANAKA's products are used

TANAKA's technologies are used

City gas

H₂ productionfacility

Portable/backup

Renewableenergy

H₂ stationStorage of H₂

H₂ gas turbine

Generation of H₂

Electrolysis of water

Electricity

Domesticuse

Single battery

Electrode catalyst

Electrode catalyst (for using hydrogen)

Reforming/PROX catalyst (for producing hydrogen)

Catalyst for water electrolysis (for producing hydrogen) Hydrogen permeable membrane

Intake of air

Steam

City gasDesulfurization

3 reaction furnaces

COshift

Cellstack

Offgas H₂（CO）Heat Utilization

Dissociation

Gaseous impurityH₂ gas

COselectiveoxidationReforming

OxidationIntake of H₂

Dispersion

Pdmembrane

Unrefined hydrogen(supply side)

Refined hydrogen(discharge side)

Recombination

Consumer IssuesTheEnvironment


CSR REPORT 2018


While the Tanaka Kikinzoku Group manufactures and supplies industrial products using precious metals, the production of such metals is limited. So we fulfill our duty to reuse and recycle the resources and circulate them into the market and society.

Creation and Protection of Intellectual Property Rights

Effective Use of Precious Metals

Circulating All Precious Metals

①Precious metal bullion purchased 　from suppliers②Recovered and refined used products 　(waste)

The precious metal bullion handled by our Group can be roughly divided into the following two types:

"Bullion Is Money"Our group thoroughly manages precious metal bullion under the slogan "Bullion is money." In addition to bullion in our production equipment, we spare no pains to recover even a trace amount of bullion attached to work uniforms and waste clothes in a careful manner to thoroughly make effective use of it.

To Realize a Circular EconomyAn increased number of companies, especially those in EU, have been working for a circular economy (CE) in recent years. CE is a concept to balance the realization of a recycling-oriented society and economic activities and requires the generation of wealth from waste materials and from waste in business activities. In the meantime, our Group procures all of the precious metal bullion to be used as raw materials from recycled resources and dispose of no bullion by landfill. We have thus already realized the "closed loop recycling" of precious metals. We will continue to contribute to the realization of CE through the effective use of precious metals.

While precious metals are limited and valuable resources that are recycled across the world, the precious metals procured by our Group from external sources as raw materials (①) can be regarded as reused articles and those recovered and refined internally as recycled articles (②). Manufacturing and selling them in the forms of products for industrial use, products for assets and products for jewelry, we do not landfill precious metal bullion by landfill as waste but circulate all of the bullion we purchase into the market.

Patent No. 06229084

Patent No. 06232496

Patent No. 06147382

Patent No. 06313764

Patent No. 06143818

Patent No. 06198343

Patent No. 06266914

Patent No. 06276501

Patent No. 06309842

Patent No. 06189740

Titanium member and manufacturing method therefor and member for electrolysis cell

Clad material for air-tight sealing of electronic component and manufacturing method therefor

Embolic coil and manufacturing method therefor

Catalyst for polymer electrolyte fuel cell and manufacturing method for the same

Immunochromatographic analysis device for detecting mycoplasma pneumoniae

Non-cyan-based electrolytic gold plating solution

Method for analyzing precious metal product using the fluorescent X-ray analyzer, and a computer program for precious metal analysis

Bonding wire for white light-emitting diode

Photocurable electroconductive ink composition

Method for producing silver particle

・・・

・・・

・・・

・・・

・・・

・・・

・・・

・・・

・・・

・・・

Some of the Patents Acquired in FY2017

* excerpt

Application of Precious Metals Technologies to the Medical Field

Precious metals recycling system [RE: TANAKA]This is a precious metals jewelry recycling system of Tanaka Kikinzoku, which was launched with "security and trust" as the keyword. We appraise precious metals with dedicated testing equipment and purchase them at a proper price set uniformly throughout Japan based on the bullion price. The purchased jewelry will be refined and then reused for industrial products, etc.

Research and Development to Create a Wide Range of Values

ZeroTanaka Kikinzoku Group

Shipped products(for industrial use, for assets, for jewelry)

Disposal by landfill

Recycling within the Group

Products Usedproducts

Preciousmetal bullion

Procurement of bullionas raw materials

(reuse)

Recovery and refinement(recycling)

Supplier

Other companies

Customers(corporations and individuals)

●Image of the precious metal cycle

Tanaka Kikinzoku Group

Fair OperatingPractices

Consumer IssuesTheEnvironment

Being aware that intellectual property rights such as patent rights, utility model rights, trademark rights, design rights and copyright, as well as know-how, are important assets for companies, we actively endeavor to develop such rights.In the research of new technology and the development, production and sales of products

and goods, we respect the intellectual property rights of third parties and avoid intentional infringement of them. We also deal with any infringement activities of other companies on our rights in a strict manner in accordance with the relevant laws of each country.

Based on various technologies concerning gold nanoparticles, our Group is developing and manufacturing a wide variety of simple test kits. Our technologies directly related to gold nanoparticles include those for changing the surface shape, controlling the particle diameter and chemically modifying the surface while our indirectly related technologies include those for fixing protein, nucleic acid, sugar, etc. to the surface of a gold nanoparticle and suppressing the nonspecific adsorption of organic materials to gold nanoparticles. In addition, we own the technology to screen the antibodies suitable for simple test agents and the technology to manufacture gold nanoparticles and simple test agents, for example. Based on these technologies, we have developed various simple test agents that can be handled easily and enable a low-cost examination and quick determination, including simple test agents for

respiratory diseases, skin diseases, mosquito-borne infections, maternal-fetal transmissions and other infections, simple test agents to be used for checking lifestyle-related diseases, which are expected to increase in the aging society, and for home healthcare and simple test agents to detect ingredients in food and hazardous substances in water.

Quality Management Activities Based on QMSTo supply safe and secure products that satisfy customers in a continuous manner, we have established and operated a quality management system (QMS) based on ISO 9001. We also review the effectiveness of the QMS and improve the system so that we can promptly respond to ever-changing customer demand on quality and meet the trust and expectation of customers. In addition, requirements of IATF16949, a quality management system for the car industry that requires a sophisticated quality management structure, are reflected for the continual improvement of the QMS.

Good Delivery RefereeTanaka Kikinzoku Kogyo K.K. serves as a Good Delivery Referee that assesses accredited refiners to guarantee the quality of precious metals distributed in the world. The company is accredited as a Good Delivery Referee for gold and silver by The London Bullion Market Association (LBMA), and also appointed as a Good Delivery Referee for platinum and palladium by London Platinum & Palladium Market (LPPM).

Evaluation from CustomersTanaka Kikinzoku Group has received awards, etc. from various customers in appreciation for our efforts to support their production activities. Taking this as encouragement, we will continue to promote the efforts.

○ Efforts for Responsible Procurement of Minerals

We promote conflict free procurement of raw materials. To this end, Tanaka Kikinzoku Kogyo K.K. has established its Responsible Mineral Management Policy to control risks related to the transaction of conflict minerals, namely gold, tantalum, tungsten and tin, in the procurement of raw materials and to avoid any procurement involving violation of human rights, terrorism, money laundering, illegal transactions, inhuman acts and armed groups. With respect to the transaction of gold, we obtained certification after an audit by a third party based on the LBMA* Responsible Gold Guidance, and have renewed the certificate every year since 2014.


CSR REPORT 2018

Realization of CSR Activities That Satisfy Customers○ Efforts to Enhance the Reputation of Our CSR Activities

Tanaka Kikinzoku Group performs business activities in consideration of CSR issues including human rights, the environment, health and safety and ethics, and complies with Tanaka Kikinzoku Group Code of Conduct and Tanaka Kikinzoku Group Standards of Conduct, which are in line with the spirit of the RBA Code of Conduct*¹, to meet the demand of customers in the world as well as social expectation. In fiscal 2017, we implemented a factory audit by a third-party institution accredited by RBA, as well as a self-audit, and took corrective actions. In addition, we call on approximately 200 suppliers to comply with the RBA Code of Conduct and continuously conduct the survey of their status of compliance and feeding back of the results. In the assessment by EcoVadis*², a supply chain CSR assessment agency, concerning the environment, occupational health and safety, ethics and supply chain, we were awarded a silver rating in September 2017.

*1 RBA Code of Conduct: Code of conduct established by the Responsible Business Alliance (RBA)

*2 EcoVadis: CSR assessment platform in which more than 30,000 organizations from 150 business categories and 100 countries in the world are registered. Gold, silver, bronze or no medal (four-grade evaluation) is assigned depending on the rating.

For Custom

ers,for the Environm

ent and for Society

EcoVadis certificateLBMA Responsible Gold Certificate

"Responsible Mineral Management Policy" and"Responsible Mineral Management Policy Concerning Gold and Silver"

http://www.tanaka.co.jp/sourcing_policy/

Customer Award Reason for the commendationCompany

Hakodate NDK Co., Ltd. Best Supplier Award Overall evaluation (received for six consecutive years)AuAg

ON Semiconductor FE Perfect Quality Award Excellent qualityAuAg

Ubukata Industries Co., Ltd. Excellent Supplier Commendation(bronze prize)

On-time delivery rate of 100%, zero defect

Overall evaluation

Highest rate for QCD of copper-based wire(received for two consecutive years)

Stable quality

Stable quality (received for four consecutive years)

AuAg

Nippon Electric Glass Co., Ltd. Excellent ProposalPartner Award

Contribution to the improvement of glassfiber production efficiency

Overall evaluation (management, technical capabilities,quality, contribution to cost reduction, delivery time)

PGM

Major awards given by customersFY2017

J-Devices Corporation Excellence AwardSemiconductor

ASE Group Best Supplier AwardSemiconductor

On-time delivery rate of 100%OMRON MALAYSIA Excellent Supplier AwardAuAg

Seagate Supplier awardPGM

Fuji Electric Co., Ltd. FY2017 PartnerPGM

NGK SPARK PLUG CO., LTD. Grand Prizein the material category

ChemicalRecovery

●Quality Management System Diagram

Organizationand itssituation

Customerrequirements

Demand andexpectation ofstakeholders

OperationOperation

PlanPlan PerformanceevaluationPerformanceevaluation

ImprovementImprovement

SupportSupportDo

Act

Plan Check

LeadershipLeadership

Customers Effects of QMS

Customersatisfaction

Products

Quality of TANAKADelivery of "good items" to customers is a principle of Tanaka Kikinzoku Group. In addition to the quality of products, we also pay attention to human rights, the environment, health and safety, ethics and other issues in the process of producing products.


Consumer IssuesHumanRights

12

Environmental Management System

Efforts to Reduce CO₂ EmissionsWe strive for the reduction of CO₂ emissions from production activities to contribute to the prevention of global warming. Our CO₂ emissions in fiscal 2017 grew by 2% from fiscal 2016 due to the construction of additional buildings and the expansion of production. While our CO₂ emissions have slightly increased due to our active business activities in recent years, we actually reduced CO₂ emissions by about 30% over the last 10 years. In particular, we were committed to energy saving activities with the full cooperation of the whole company after the Great East Japan Earthquake in March 2011, which resulted in a significant reduction of energy consumption after fiscal 2011. We will continue to enhance energy saving activities such as the efficiency increase and operational improvement of various devices to further reduce CO₂ emission.

◎Best Energy Saving Subject Discovery AwardAs a program for the Energy Saving Month, we organized "Best Energy Saving Subject Discovery Award" for all employees in February 2018. We received 295 applications, such as "an energy saving item based on a totally new idea" and "an idea to achieve energy saving with a little ingenuity," and commended 61 of them. The subjects we commended will be actively adopted as energy saving measures in the respective worksites. We will also share all of the subjects in the applications through the Environmental Managers Sub-committee and the internal database and work to introduce them in the whole Group.

◎Introduction of Photovoltaic Power GenerationIsehara Plant and Tsukuba Facility of Tanaka Kikinzoku Kogyo K.K. introduced photovoltaic power generation in March 2018. Each of them estimates that the introduction will reduce CO₂ emissions from the whole plant by 4%. In addition to the bases above, we have already introduced photovoltaic power generation at Shonan Plant of Tanaka Kikinzoku Kogyo K.K. and Saga Production Headquarters of Tanaka Denshi Kogyo K.K. We will promote the introduction at other plants in a planned manner.

Efforts to Reduce Industrial Waste Emissions

Environmental Incident Eradication Activities

TANAKACSR REPORT 2018 13TANAKA

CSR REPORT 2018

20150

FY2012 2013 2014

4

22

2

43

2017

3

2

20161

（Cases）10

8

6

4

2

●Number of Environmental Incidents

●Industrial waste emissions

Air pollution Water pollution Others


Protection of the Global EnvironmentTo hand down the beautiful earth to the future is a task shared by the international community and also a major challenge. Tanaka Kikinzoku Group is pursuing every possibility to minimize the environmental impact of its business activities.

FY2017 FY2018 FY2020

IdIdIdIdIdIdIdIdeaeaeaeaeaeallllllll SStStStStStStSt tatatatatatateeeeee wewewewewewe wwwwwwououououououldldldldldldldld llllllllikikikikikikikikeeeeee ttotototototo aaaaaa hhchchchchchchiiieieieieieieveveveveveveEnvironmental activities, including protection of the environment

and contribution to biodiversity, are actively performed to be a leading company in environmental conservation.

StStStStStStStStSt tatatatatatatatateeeeeee e wewewewewewewewe nnnnnnnneeeeeeeeeeeeeeeedddddddd d ttotototototototo aaaaaaaa hchchchchchchchchiieieieieieieieieveveveveveveveveSpecific activities and measures to be a leading company

in environmental conservation can be designed and launched.

A system to be a leading company in environmental conservation is established.PPrPrPrPresesesesenenenenttttt

Ideal State we would like to achieve

State we need to achieve

Present

We have established the environmental action policy for the whole Group based on the mid-term business plan “GOGO Plan 2020" and aim "to be a leading company in environmental conservation in Japan" as the "Ideal State we would like to achieve" by fiscal 2020.

GOGO Plan 2020 Core Environmental Policy"To be a leading company in environmental conservation in Japan”

CoreEnvironmental

Policy

All of our production bases in Japan have obtained ISO 14001 certification on environmental management, and make continuous efforts to perform environmental conservation activities through the implementation of the PDCA cycle. In particular, we set targets for the Group as a whole to reduce CO₂ emissions (for prevention of global warming) and industrial waste (for establishment of a recycling-oriented society) and eradicate environmental incidents (for prevention of pollution), and aggressively strive to meet the targets. To promote environmental conservation activities in a steady and smooth manner, we have set up a Group-wide structure with the Central Environmental Committee, which is composed of site managers, at the top. In addition, SHE* Promotion Office Manager Council, as well as the Environmental Managers Sub-committee composed of environmental managers, holds a meeting periodically to share information and exchange opinions actively.* SHE: Safety, Health and Environment.

●Structure to promote environmental conservation activities

CSR Promotion Department

SHE Promotion Office Manager Council

Environmental Managers Sub-committee

Environmental Committee of each worksite

TANAKA Holdings Co., Ltd.President, executives

To prevent air pollution, water pollution and soil pollution, we have set internal limits that are even stricter than the levels required by law. In particular, the internal limits for air and water pollutants are set to be 50% of the regulatory values in principle. In case of any abnormal situation, we respond promptly to it and strive to identify the cause and prevent its recurrence. We convey information internally through "flash reports" and submit reports to relevant government bodies in accordance with the reporting and notification standards. While we had two environmental incidents in fiscal 2017, we took corrective measures immediately and have worked to prevent their recurrence.

Tanaka Kikinzoku Group generates a large amount of acid and alkali waste liquid when precious metals are dissolved, refined or collected from waste precious metal solution. We thoroughly separate waste to promote 3R (reduction, reuse and recycling). In fiscal 2017, the waste emissions decreased by approximately 300 tons or 7.8% year-on-year.

0FY

12,000 (tons/year)

10,000

8,000

6,000

4,000

2,000

2012

11,296

2013

6,507

2014

5,598

2015

4,339

2016

4,028

2017

3,714

●CO₂ emissions

5.4 5.2 5.34.8

4.23.7 3.6 3.6 3.93.8

2008 2009 2010 2011 2012 2013 2014 2015 2017 FY2016

Remotecontrolpanel

Press area

Dissolution/extrusion area

Wire drawing area

Contact point line

Compressor

Air supply

Air supply

Press area

Dissolution/extrusion area

Wire drawing area

Contact point line

Compressor

Remotecontrol panel

Remotecontrol panel

Remotecontrol panel

Remotecontrol panel

CO₂ emissions (10,000 tons)6.0

5.0

4.0

3.0

2.0

1.0

0.0

CO₂ emission factor of Tokyo Electric Power in FY2016 (0.474 kg-CO₂/kWh) is used to calculate CO₂ emissions from power consumption for all fiscal years.

Reduced by approx. 30%

11

11

FY2016

FY2016

FY2017

FY2017

4%

1%

4%

4%

Isehara Plant Tsukuba Facility

Reduced by approx. 70%

An example of the subjects commended in the Best Energy Saving Subject Discovery Award●Operational improvement of a compressor (Tomioka Plant)[Before the improvement]The compressor was continuously activated because the operation hours were different between processes.

[After the improvement]A remote control panel has been installed for each process to make it a rule to press the stop button after the use of the compressor air. Now, the compressor is stopped when the stop buttons for all processes are pressed, which reduces excess power consumption.

[Effect] Power use reduced by 47 thousand kWh/yearCost reduced by 847 thousand yen/year

TheEnvironment

Central Environmental Committee

Saga Production Headquarters,Tanaka Denshi Kogyo K.K.

Shonan Plant,Tanaka Kikinzoku Kogyo K.K.

Isehara Plant,Tanaka Kikinzoku Kogyo K.K.

Tsukuba Facility,Tanaka Kikinzoku Kogyo K.K.

Plant Year ofintroduction

CO₂ emissionreduction effect

Competition of ideas - Robot Contest of National Colleges of Technology (Kosen-Robocon) is an event where technical college students think outside the box and create robots by themselves to experience the joy of manufacturing. Students from 62 campuses of 57 technical colleges all over Japan compete in a preliminary round in eight regions, and up to 26 teams are selected to move into the national competition held in Tokyo.

Tanaka Kikinzoku Group has co-sponsored the Robocon for technical college students since 2012 to support manufacturing activities of young engineers, and President Akira Tanae presents a special award in the national competition. Tanaka Kikinzoku Group will continue to support the Kosen-Robocon.


14

Grants for Research on Precious MetalsTo support various efforts for "the new world developed by precious metals," this grant program invites research projects on precious metals in any discipline, such as research on new technologies to which precious metals can contribute. We received a total of 167 applications for this 19th invitation and provided grants of 15.2 million yen in total to 23 research projects.

Bond of Love - Cherry Blossom Trees Planting 135We have performed various volunteer activities to support the rehabilitation of the Tohoku Region since the Great East Japan Earthquake. In fiscal 2013, we launched support activities under the theme of "inheritance of memories" with the initial target of creating a row of cherry blossom trees in the furthest inland areas hit by the tsunami so that they can be landmarks for evacuation. We now develop the support activities funded by donations from employees with the aims of maintaining the planted cherry blossom trees and passing down the story of the great tsunami to next generations. The goal is to plant 135 trees by 2020 when we celebrate our 135th year in business, and we have planted 127 trees in total so far.


CSR REPORT 2018

The contact point for the "Bond of Love - Cherry Blossom Trees Planting 135" activities was transferred from CSR Promotion Department to Tanaka Kikinzoku Memorial Foundation in April 2017, and I participated in the planting of cherry blossom trees for the first time. While I had been involved as a volunteer for the fundraising activities before, I learned that the operation staff has to work much harder than participants. As the "Bond of Love - Cherry Blossom Trees Planting 135" initiative has been well established in the Tanaka Kikinzoku Group with the activities of the past six years, a large amount of money was donated from Group companies again this year. While placing great value on the activities that we have accumulated, we will work to improve our activities and continuously contribute to the rehabilitation of the affected areas in cooperation with you.

Secretariat, Tanaka Kikinzoku Memorial Foundation(assistant to Manager of Finance and Accounting Department, TANAKA Holdings Co., Ltd.)

AKAI Takako

Contribution to Local Communities and SocietyTanaka Kikinzoku Group is committed to the activities we can perform to contribute to the local communities and countries with which we are linked through our business activities so that they can be more healthy and prosperous. We are developing support activities as corporate efforts, as well as volunteer activities of the employees, in various places with focus on continuity.

Dr. IKEUCHI YoshihoAssociate Professor, the University of Tokyo

Development of a platinum electrodedevice for manipulating artificial

nerve tissues produced from humaninduced pluripotent stem cells (iPSCs)

Gold Award2 million yen

Tanaka Kikinzoku Memorial Foundation

Main Activities[Donation and Fund-raising Activities]We held internal flea markets and donated two recumbent bicycles purchased from the proceeds to a community activity support center.

For other activities, see our website: https://www.tanaka.co.jp/about/csr/communication.html

Donation and fund-raising activities(Tanaka Electronics Singapore Pte. Ltd.)

Cultivation of human resources and development of art and cultureOffice tour for families (Shonan Plant)

Sports promotion activitiesGold, silver and bronze medals for Tokyo Marathon 2018

Local cleaning activities(Isehara Plant)

Worksite: Saga Production Headquarters, Tanaka Denshi Kogyo K.K.No. of participants: 125Date: August to December 2017

We donated proceeds from internal flea markets and the sales of used PCs and miscellaneous goods in the company to a childhood cancer treatment fund.Worksite: Tanaka Electronics Singapore Pte. Ltd.No. of participants: 200Date: July 2017

[Cultivation of Human Resources and Development of Art and Culture]We organized an office tour for the employees working at the plant and their families. The first tour was organized in 2012 and this year's tour was the sixth.Worksite: Shonan PlantNo. of participants: 24 in total (15 children and 9 parents)Date: August 2017

We organized "Summer Holiday Science Workplace Tour in TANAKA," a work-experience and office tour for the development of science and engineering-related human resources. The first tour was organized in 2015 and this year's tour was the third.Worksite: Shonan PlantNo. of participants: 28 in total (20 students and 8 parents)Date: August 2017

[Sports Promotion Activities]We supported children from Seikaen (an orphanage) in sports practice for prefectural tournaments (men's baseball and women's volleyball).Worksite: Saga Production Headquarters, Tanaka Denshi Kogyo K.K.No. of participants: 39Date: May to August 2017

We provided a total of 12 medals for Tokyo Marathon 2018, which were awarded to the respective top three finishers (gold, silver and bronze medals) in the men's and women's marathon races as well as to those in the men's and women's wheelchair marathon races, which have been international races since 2016.Date: February 2018

[Local Cleaning Activities]Each of our worksites implements activities to clean the plant, its neighborhood and other areas in a regular manner.Worksite: Iwate Plant, Tomioka Plant, Ichikawa Plant, Isehara Plant, Hiratsuka Plant, Shonan Plant, Tsukuba Facility, Saga Production Headquarters of Tanaka Denshi Kogyo K.K., Hiratsuka Office of Electroplating Engineers of Japan, Limited, Main Store (Ginza) of Tanaka Kikinzoku Jewelry K.K., Tanaka Electronics (Hangzhou) Co., Ltd.

Event to experience boccia in the corporatesports festival in October 2017

Co-sponsorship of Robot Contest for Technical College Students (Kosen-Robocon)

Support of Sports for People with Disabilities

Dr. TANAKA KatsunoriChief Scientist, RIKEN

In vivo precious metalcatalysis in mammalsfor treatment of disease

Gold Award2 million yen

Selected as a model company in the promotion of sports in Tokyo for fiscal 2017 for three consecutive years

CommunityInvolvement

Bond ofLove - Cherry BlossomTrees Planting 135

Tanaka Kikinzoku supports and cheers sports for people with disabilities through an agreement to become an official partner of the Japanese Para-Sports Association and other initiatives. Furthermore, we started to co-sponsor the Japan Blind Football Association (a non-profit organization) and the Japanese women's blind football team in April 2017. In fiscal 2017, in addition to watching and cheering as well as participation in volunteer activities at Japan Para Championships organized by the Japanese Para-Sports

Association and domestic and international competitions of blind football, we organized events to experience "boccia" as a measure to promote sports for people with disabilities within the company. More than 750 employees in total participated in the events, which were held at the worksites and as part of the corporate sports festival in October 2017.

The physical and mental health of employees leads to improvement of productivity. Our Group organizes the "health challenge" program once a year to encourage employees to enhance their awareness of health on a daily basis. In this program, the participants freely select targets from among 17 items related to health maintenance and promotion and try to achieve them during the challenge period (about two months). The

program is designed to give employees an opportunity to make it a habit to maintain and promote their health and prevent diseases, etc. In addition, while a stress check has been conducted since 2016, we are working to disseminate its purpose and significance as a measure for mental health among employees so that more employees take a stress check.

For comprehensive safety inspection of all production sites, we reviewed procedures for non-regular work, implemented improvement measures to reduce the risk of being caught and checked the implementation status in fiscal 2017. The implementation of the improvement measures with the concerted efforts of all employees also enhanced their safety awareness and we successfully reduced the number of accidents on production sites in fiscal 2017 to the lowest level ever. However, many employees had a falling accident on their way to work or in an administration-related workplace. Accordingly, we now give training to prevent falling accidents with DVDs and safety training materials in a constant manner. We also had safety managers mutually patrol their and other worksites

and conducted safety diagnosis by safety officers of the Japan Industrial Safety and Health Association as we did in the previous year. The number of traffic accidents was 54 in fiscal 2017, which remained almost unchanged year-on-year, while most of the accidents occurred during driving to or from work or personal time as before. The situation that more than a half of them were the accidents in which our employees were the victims has not changed either. To prevent either occupational or traffic accidents, we believe that it is crucial to enhance everyone's sensitivity to and awareness of safety. Based on this idea, we will promote safety management activities including the strengthening of safety training.

TOPICS

Imperial Palace WalkingWe promote programs to encourage and assist employees to be involved in sports activities including "doing," "watching" and "supporting" them. As a program for the promotion of "doing" sports activities, we organized an "Imperial Palace Walking" event in October 2017 to promote the health of employees. Twenty-three employees and their family members in total joined the event and walked for about one hour on the approximately 5-km walking course around the Imperial Palace. We received comments from the participants such that "I joined the event with my child and enjoyed it as a family event" and "The event made me feel like doing more exercise."

Free, Vigorous and Honest C

orporate Culture Creation of a

Safer Work EnvironmentCreation of a workplace where employees can work safely with a sense of security is a basic but profound challenge for companies. Tanaka Kikinzoku Group strives to ensure the safety and health of employees while focusing on the development of relationships that facilitate mutual cooperation between them.


CSR REPORT 2018

Health Activities

As a retail company, Tanaka Kikinzoku Jewelry K.K. is responsible for ensuring the safety of customers as well as employees. To establish an environment where customers can enjoy shopping safely, it is essential that employees enhance their awareness of safety. We actively conduct initiatives for it, including enlightenment activities to encourage employees to submit proposals on potential accidents and KYT (kiken yochi kunren (danger prediction training)) activities. In addition, we have notified employees to use an elevator in principle as a measure to prevent a falling accident, which occurred often during the previous fiscal year, and gave safety education to all employees on a temporary basis. We will continuously work to enhance the awareness of safety among all employees through various initiatives.

OTA Takahito　Safety Manager, Tanaka Kikinzoku Jewelry K.K.

FY2015 to FY2017 FY2018 to FY2020Having gone through the "State we need to achieve" in fiscal 2017 and aiming to be the "Ideal State we would like to achieve" in fiscal 2020 based on the mid-term business plan "GOGO Plan 2020," we will promote safety management activities under the core safety policy "Give top priority to safety, and establish a secure and cheerful workplace."

GOGO Plan 2020 Core Safety Policy"Give top priority to safety, and establish a secure and cheerful workplace”

Safety Activities

IdIdIdIdIdeaeaeaealllll StStStStSt tatatatateeee ewewewe wwwoouououldldldldld lllllikikikikikeeee ttotototo aaaa hchchchchiieieieie eveveveEmployees cooperate with each other to maintain a safe,

secure and cheerful workplace

Ideal State we would like to achieve

Employees have enhanced their awareness of safetyand can ensure their safety by themselves

StStStSt tatatateee wewewe nnneeeeeedddd ttototo aaa hchchchiieieieveveveState we need to achieve

Labor Practices

Founded in 2010, Monozukuri University has provided education and training for human resource development in various forms to new employees, young mid-career employees, year-round employed workers and equipment maintenance staff. In particular, the new employee training gives top priority to education on safety, health and the environment and also includes education and training on the basics of precious metals and the basics of manufacturing. The lecturers are senior workers who are playing active roles in the production field and have much practical experience. We will continuously work to provide education and training to develop human resources that can immediately work effectively for the assigned destinations.

YAMAZAKI HiroshiChief Manager, Human Resource Development Section, Business Administration DepartmentTanaka Kikinzoku Kogyo K.K.

Foundeducain vaemplomaintgives envirobasicsThe lroles experand tresouwork destin

YAMChief MSectionTanaka

Engagement SurveyTanaka Kikinzoku Group (TKG) conducts an engagement* survey (employee awareness survey) of all employees including local staff in other countries every three years in recognition that the improvement of employee satisfaction is an engine for the growth of the company. The timing of the survey is set in a way to allow the survey results to be reflected on the measures in the first fiscal year of each of the two three-year terms of GOGO Plan 2020, our six-year medium-term management plan. The most recent survey was conducted in September 2017 and the results were announced in the TKG quarterly manager meeting in November of the same year. We will incorporate the results into the measures for the three-year plan that starts in 2018 and develop them.

Book to Make Use of CSR TsushinAs an internal communication tool for our CSR activities, we have issued "CSR Tsushin" (CSR daily news) every day since April 2, 2012. When the 1,000th issue was published on June 17, 2016, four years after the start of issuance, we extracted and re-edited approximately 230 articles and prepared "Book to Make Use of CSR Tsushin." The printed version of the book is distributed to all worksites and the data are also shared in electronic form to make it easy to use the book as a CSR-related education or presentation material. Employees can browse and use it freely at any time. In addition to the daily issuance of CSR Tsushin, we will regularly update the Book to Make Use of CSR Tsushin to enhance internal communication.

* "Engagement" means the mind of employees to make continuous efforts without giving up until they produce greater results than expected with an idea that each worker is always playing the main role as well as pride and passion for their own jobs.


18

Work-style ReformsTanaka Kikinzoku Group is committed to work-style reforms to establish a workplace where employees can work with vitality. We encourage employees to take more paid holidays through various measures and actively send related information from the company in an effort to develop an atmosphere where employees can balance work and child care or family care. We will continue to make efforts to establish a flexible and comfortable working environment.

Human Resource DevelopmentTanaka Kikinzoku Group is cultivating personnel in a planned and systematic manner in accordance with its policies of using employee training to build self-awareness and self-reliance, linking education closely to business and spending as much as 20% of work time on education. We consider that people represent both resources and assets of a company. Again in fiscal 2017, many employees took various training courses ranging from new employee introductory training to management training according to our education program. Especially in the manager training, which was reformed in 2016, many managers became aware of various issues through the training and used the outcomes for the management of their own departments. While listening to comments from the participants, we will improve and update the education program every year.


CSR REPORT 2018

Active Role of Each EmployeeWhile employees are being diversified, creation of a workplace where each of them can fulfill their potential is essential for the future of Tanaka Kikinzoku Group. We pay attention to various aspects of diversity and actively introduce new approaches.

Book to Make Useof CSR Tsushin

Our Group is committed topromoting the developmentof a working environmentwhere employees can balancework and family care."Tomonin" mark

●FY2017 (in Japan)

Number of female managers

Short-time work hours during pregnancy

Child care leave

69

1

44

Reduced work hours for child care 70

Average service years: female １１．２

Number of female employees 825

Number of male employees 1,942

（1）

（66）

（61）

（831）

（74）

（1,924）

* The numbers in parentheses are data from the previous fiscal year.

Ratio of employees with disabilities 1.86% （1.80%）

（42.4）

（41.6）

Average service years: male 13.6

Average age: female 42.3

Average age: male 42.3

HumanRights

Labor Practices

Along with legal compliance, we strive to ensure observance of corporate ethics to conduct fair and sound business activities. CSR & Communication Divisions HQ receives reports on compliance-related problems and external information on compliance in

an integrated manner, takes corrective actions and promotes measures to prevent recurrence throughout Tanaka Kikinzoku Group while receiving advice and guidance from lawyers, consultants and external experts.


20

Compliance Promotion System

Corporate Governance Structure and Internal ControlTanaka Kikinzoku Group aims to realize healthy and transparent business management by enhancing the management monitoring mechanism and to always be an efficient and competitive corporate group. We have also established a corporate governance system and specified basic policy for internal control to ensure respect for the rights and interests of all stakeholders, business operations in a legitimate and reasonable manner and appropriate and transparent accounting. Based on the system and basic policy, the Board of Directors, Group Management Committee, the Board of Auditors and Internal Auditing Department play their respective roles in the internal control system designed to facilitate the achievement of our management goals in a reliable manner.

Internal Reporting System


CSR REPORT 2018

Export Trade Control Office works as a department dedicated to security export control, which aims to prevent any product or technology of TANAKA from being used for international terrorism or crime or diverted to nuclear or biochemical weapons, etc. that threaten peace. Our office is also in charge of aviation security and the management of the AEO certification system to ensure the safety of air transportation and smooth export clearance at the same time. While complying with Customs Act, Foreign Exchange Act and other relevant domestic laws and also paying close attention to international matters such as the impact of secondary sanctions by the US Government on overseas companies, we will work hard to underpin the credibility of TANAKA.

YONEKAWA TakashiManager, Export Trade Control Office, Administration DepartmentTanaka Kikinzoku Kogyo K.K.

Compliance, Risk Management and Corporate GovernanceIn addition to legal compliance, we continuously promote initiatives to develop the business activities that are appropriate in light of ethics of society on a global scale throughout the Group.

As a measure to enhance compliance and detect and correct any non-compliance, dishonest act, etc. at an early stage, we have established an internal reporting system. The content of a report made to the Internal Reporting Committee is examined in a fair manner, which is followed by an investigation of it if necessary. When the fact of non-compliance, dishonest act, etc. has been confirmed, the relevant persons and departments are ordered to take corrective measures. The whistleblowers are strictly protected to ensure that they are not treated in an unreasonable manner.

Promotion of Personal Information ManagementTo manage personal information, Tanaka Kikinzoku Group classifies the information into the three categories of "personal information of individual customers," "personal information of corporate customers" and "personal information of employees, etc." Especially for the management of personal information of individual customers, we have obtained ISO 27001 certification to promote proper management of the information.

Risk Management ActivitiesTo respond to various risks we face through our business activities, we regularly conduct a risk assessment and work to reduce the risks. A risk management committee meeting is held every six months to summarize the situation of responses to risks in the whole Group.

Business Continuity Planning (BCP)We conducted a drill of the BCP emergency task force in preparation for a major earthquake hitting the Tokyo area in February 2018. In this fiscal year's drill, we focused on the response in case of a major earthquake occurring at night or on a holiday (outside working hours) and the president and managers discussed countermeasures and improvement plans. Remedial measures against the issues and problems identified in the drill are taken in a planned manner.

Harassment Prevention TrainingTo prevent human rights violations including abuse of power, sexual harassment and workplace discrimination against pregnant women, we have organized harassment prevention training since fiscal 2014. In fiscal 2017, training for general employees was organized in all domestic bases and provided to a total of 1,657 employees. In the training, the participants also deepened their understanding of LGBT*.* LGBT: lesbian, gay, bisexual and transgender

●Board of Auditors (Auditors)TANAKA Holdings Co., Ltd. has in place the Board of Auditors composed of all auditors, which receives reports concerning important matters related to audits and makes discussions and decisions about them. Auditors are mainly in charge of monitoring business operations of directors and at least one auditor is appointed from the outside to ensure the objectivity of the business management.● Internal Auditing DepartmentInternal Auditing Department has a duty and responsibility to assess and verify the efficiency and appropriateness of the business of the Group companies on a fair and independent footing and make recommendations to management. The department also ensures mutual cooperation with the Board of Auditors and accounting auditors through a regular exchange of opinions and other activities.

●Board of Directors (Directors)The term of the directors of the Group companies is one year so that they can efficiently respond to the rapidly changing business environment and their management responsibility is made clearer. The Board of Directors of TANAKA Holdings Co., Ltd. decides the basic policy for the business operations of the company as well as the Group as a whole. The Board of Directors of each company makes decisions on important matters and receives reports on the status of the business operations to supervise the operations of the directors.●Group Management CommitteeAs to important issues related to the Group as a whole, as well as the matters for which adjustments between Group companies are required, Group Management Committee makes discussions and decisions, undertakes adjustments and gives approval in order to facilitate discussions and operations in the Board of Directors. As the president of each Group company attends the committee meeting, the committee also aims to report the respective activities of the companies and share the relevant information.

Drill of the BCP emergency task force (Headquarters of TANAKA Holdings Co., Ltd.)

Reporting/ Proposalof improvement

●Compliance Promotion System Diagram

AuditCoordination

CoordinationAppointment/DismissalAppointment/Dismissal Appointment/

Dismissal

Group companies Industrial companies/Cross-functional companies

Board of Auditors

Internal AuditingDepartment

Board of Directors

Group ManagementCommittee

IndependentAccountingAuditor

Coordination

General Shareholders’ Meeting

TANAKA Holdings Co., Ltd.

Dailymanagement Companies/Units (Manufacturing, engineering,sales, management)

Compliance with laws, codes, etc. related to the operations

Internal Reporting Committee

LawyersConsultants

Government bodiesOther experts

Reporting ofinappropriateactions, etc. Feedback

Identifiedproblems

Advice/Guidance

Establishment of a mechanismto enhance the system

CSR &Corporate

CommunicationsDivision

TATATATANANANANAKAKAKAKA HHHH lolololdidididingngnggsss CCoCoCo.,., LLLLtdtdtdtd..PrPrPrPresesesesididididenenenenttt,t, eeeexexexexecucucucutitititivevevevessss

TANAKA Holdings Co., Ltd.President, executives

Consumer IssuesHumanRights

OrganizationalGovernance

54 （54）

2017

18 （2）

2017

42.342.3

2017

40


CSR REPORT 2018

CSR Performance

Target number Actual cumulative number

Third-party Assurance

Number of the new patents registered in Japan

0FY

20

40

60

80（cases）

2013 2014 2015 2016

39 31 3962

Number of executives and employees (in Japan)as of March 31, 2018

Ratio of employees with disabilitiesNumber of managers and higher-level personnelas of March 31, 2018

Number of employees who used the childcare leave system (in Japan)FY2017

Average age

Short-time work hoursduring pregnancy

1Child care leave

44（including 3 males）

Reduced work hoursfor child care

70（including 1 male）

Number of employees: 2,767

Male

1,942Female

825

Total: 581

Male

512Female

69

39.442.0 40.043.0 41.042.0 41.642.4

20152014 FY2013

23 （2） 24 （3）

16 （4）

31 （1）

20160

10

20

30

40

50（cases）

Number of occupational accidents

Occupational accidents(the number in parentheses is the number of accidents involving an absence from work of four days or more)

Number of traffic accidents

Traffic accidents(the number in parentheses is the number of accidents during driving to or from work or personal time)

FY0

2

1

（％）

20162013 2014 2015 2017

1.86%1.80

1.43

1.701.68

0FY

20

40

60（age）

2013 2014 2015 2016 2017

Male Female

20152014 FY2013

59 （56） 55 （53）59 （56）

2016

60 （60）

0

10

20

30

40

50

60

70

80

90（cases）

Tohoku Reconstruction Volunteer Program - the number of the planted cherry blossom trees (cumulative number)

2013

2014

2015

2020

2016

FY

3060

84107

0

2017 127

10 20 30 40 50 60 70 80 90 100 135110

135FY

0

120

100

80

60

40

20

（persons）

Number of participants in sports for people with disabilities * real number(watching and cheering, volunteer activities)

33人

98人

0人2015 2016 2017

2017

3,714

Industrial waste emissions

0FY

10,000

8,000

6,000

4,000

2,000

（tons/year）

2013

6,507

2014

5,630

2015

4,339

2016

4,028

CO₂ emissions

CO₂ emission factor of Tokyo Electric Power in FY2016 (0.474 kg-CO₂/kWh) is used to calculate CO₂ emissions from power consumption for each of the financial years.

0

25,000

20,000

30,000

35,000

（tons/year）40,000

36,752 36,100 36,364 37,669

2016

38,534

2017 FY2013 2014 2015

I also paid attention to the attitude to face reality and the look toward the future, both of which are found throughout the report including the pages from "Message from the President" to "Values Created by TANAKA" as well as articles on safety, quality and environmental conservation and activities to contribute to local communities. To understand the business of Ichikawa Plant to recycle components for automobile exhaust gas, I had to see a world map. I felt that this represents the influence of the company on society "in reality" and "in the future" as well as on a global scale. When I read the draft of this report, I attached the word "global" to a large number of phrases in it, such as risks, businesses, values provided, values created, the environment, social contribution and corporate culture. Although a person can naturally have only limited knowledge and experience, with awareness of it, I tried to understand the individual activities of the company,

which is developing a very wide range of businesses, from both reasonable and emotional aspects. A series of scandals of companies and sports organizations have recently been in the news. In this phenomenon, those there feel that something is wrong and discuss it with other people or post it to share the sense of crisis that "the social order will be destroyed" with more people, and the circle then grows to cause a large social problem. Many reports have demonstrated that even a small, familiar problem on safety, quality or the environment can be recognized as a social challenge and poses a serious corporate risk in the current globalized society. As the company is working hard to develop human resources through Monozukuri University and other initiatives, I expect that it will have education and workplace communication that further enhance awareness.

I also noticed concerns in reality, which are the figures for CO₂ emissions and traffic accidents. Although they have decreased over the past 10 years, it is quite possible that some problem triggers criticism of reality from the future in consideration of the situation that information on the role of automobiles, which are a product of modern civilization, appears on newspapers and magazines almost every day. Although this is also a difficult challenge from a technological perspective, I

hope that the company makes even more efforts to improve the figures. In recent news, I felt uneasy with some comments of managers of major companies given with respect to the scandals on product specifications, such as "The internal communication was not enough," "I trust people but do not trust people's acts" and "What is important in crisis response is to protect all stakeholders." They may indicate that the future is already becoming reality.

Today, the recognition that the digital revolution will be followed by a "material revolution" is presented. While the company is further expanding its potential for the future, I feel strongly encouraged by the message from Mr. Tanae, the president, in the opening of this report mentioning that the company aims for its growth and

development to be a global company and that it will promote CSR activities in a more global way. The message presents his determination to take further steps together with each of the employees. I hope that the company turns awareness of today into ingenuity of tomorrow while using this report as a clue.

Third-party Opinion


CSR REPORT 2018

I visited the main plants of TANAKA Holdings Co., Ltd. and constantly exchanged opinions with the staff over the past six years. Then, when I read the final draft of this report, I got an especially strong impression in comparison with previous years because this year's report contains more comments from employees than the report for fiscal 2017 and indicates advances in the efforts to establish "honest corporate culture" through the development of "human assets" and the "corporate governance" structure for modern management.

Visiting Professor of Tsukuba Gakuin University, Representative of CCI Research Institute, Management Communication Study Team Leader of the Japan Society for Corporate Communication Studies, Member of the Public Relations Society of Japan, Environmental Counselor

Turn Awareness of Today into Ingenuity of Tomorrow

Our Future Has Already Become Reality

What the Globalization of Companies and Society Means

Understandability

Difficult to understand2%

Message from the PresidentAbout the Tanaka Kikinzoku GroupDelivery of New Values to Society

Research and DevelopmentQuality of TANAKA

Protection of the Global EnvironmentContribution to Local Communities

and SocietyCreation of a Safer Work Environment

Active Role of Each EmployeeCompliance

Risk ManagementFoundation of CSR

and Business ManagementCSR Performance

Easy tounderstand44%

Average53%

Rich42%

Appropriate82%

Average53%

Content Information volume Design

How did you feel about the report?

What articles were especially interesting for you? (multiple answers allowed) Number of answerers: 2,114

0 5 10 15 20 25 30 35（%）

Results of the Questionnaire Survey for CSR Report 2017

Insufficient 1%

Good49%

Average45%

Not good2%

Too small3%Too much12%

Human resource development P1８

ISO 26000 and SDGs Comparison TableCore subjectsof ISO 26000 Efforts of TANAKA Page

1 2 3 4 5 6 7 8 9SDGs

10 11 12 13 14 15 16 17Risk management activities / Business continuity planning (BCP)Organizational

GovernanceCorporate governance and internal control / Board of Directors (directors) / Group Management CommitteeBoard of Auditors (auditors) / Internal Auditing DepartmentEfforts for responsible procurement of mineralsHuman Rights

Work-style reformsEngagement surveyCompliance promotion systemInternal reporting systemHarassment prevention trainingSafety activities / Health activities / Imperial palace walkingLabor Practices

Book to Make Use of CSR TsushinCirculating all precious metals / "Bullion is money" / To realizea circular economy / Recycling through RE: TANAKA

The Environment

Environmental management systemEnvironmental incident eradication activities

Efforts to reduce industrial waste emissions

Efforts to reduce CO₂ emissions / Introduction of photovoltaic power generation / Best Energy Saving Subject Discovery Award

Mitigation of global warming and expectations for the use of hydrogenThe EnvironmentConsumer Issues

Development of electrode catalyst for water electrolysis / Potential of fuel cell and FC Catalyst Development Center / Fuel cell solutions provided by TANAKAApplication of precious metals technologies to the medical fieldCreation and protection of intellectual propertiesFair

Operating Practices Expectation from the global community and response to it

Quality management activities based on QMS / Good Delivery RefereeConsumer Issues

Evaluation from customersPromotion of personal information managementGrants for research on precious metalsCommunity

Involvement and Development

Co-sponsorship of robot contest for technical college students (Kosen-Robocon) / Cultivation of human resources and development of art and culture

Bond of love - cherry blossom trees planting 135Support of sports for people with disabilities

Donation and fund-raising activities / Sports promotion activities / Local cleaning activities

P20 ◯

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P21

P21P11P18P19P20P21P21P17

P19P08

P12P12

P13

P13

P06P07

P09P09P11P10P11P21P14

P15

P14P15

P15

SHIMIZU Masamichi

【Profile】Mr. Shimizu graduated from College of Economics, Yokohama National University. After working at Japan Management Association, he was a professor at College of Business Administration, Shukutoku University, and retired to establish CCI Research Institute in 2014. His areas of specialty are environmental and CSR communication and PR management. His publications include “Strategic Thinking on PR Management,” “Companies Learning from Sanpo Yoshi and Loved by People,” “Environmental Communication,” “Company Friendly to People - Security and Safety, Management Based on Ties,” “Introduction to Public Relations," "Theory and Practice of CC Strategies - Environment, CSR and Coexistence," "Introduction to CSR Management for Company Employees" and many more.

HumanRights

OrganizationalGovernance

TheEnvironment

TheEnvironment

Labor Practices


Consumer Issues

Consumer Issues

CommunityInvolvement

CSR Report 2018 › english › about › csr › pdf › csr_2018.pdf · 2018-10-01 · CSR Report...

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Transcript of CSR Report 2018 › english › about › csr › pdf › csr_2018.pdf · 2018-10-01 · CSR Report...